Florida deals singe area banks

BECKY YERAKCHICAGO TRIBUNE

The Florida real estate market is burning some Chicago-area banks.

Palatine-based First Bank and Trust Co. of Illinois, which bills itself as "Chicago's Step Ahead Bank," is suing two Florida developers in Broward County, claiming that a $7.8 million loan it made in October 2006 for a four-story, 11-unit condominium complex in Ft. Lauderdale is in default.

The breach-of-contract lawsuit, which seeks a judgment of $8.2 million and attorneys' fees, was filed Sept. 2 in a U.S. District Court in Illinois. First Bank is represented by Roger Stetson of Barack Ferrazzano Kirschbaum & Nagelberg.

The $416.2 million-asset bank, which was founded in 1962 and has one branch, makes commercial real estate loans that range from $2 million to $15 million.

Recent deals include a $9 million loan secured by 33 units in a converted 195-unit condominium in Lincoln Park, and a $2.9 million acquisition and construction loan to renovate a vacant grocery store into an indoor sports complex in Chicago Heights. First Bank also has made recent loans in seven other states.

Also having troubles in the Sunshine State is Chicago-based Corus Bankshares Inc., whose fortunes are heavily tied to condominium developers.

As of June 30, the $9.01 billion-asset bank had $830.4 million in non-accrual loans, or those not generating any interest income for the bank because payment in full of principal or interest is not expected.

Of that, $429.3 million was in Florida, of which $344.7 million was in Miami.

On Friday, the Mortgage Bankers Association said the delinquency rate for mortgage loans on one- to four-unit residential properties -- those at least one payment past due but not yet in foreclosure -- stood at 6.41 percent at the end of the second quarter, the highest recorded in its survey.

"The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due, primarily in California and Florida," the association said.

Kineo hiring moves forward: Kineo Group said Mark Nystuen has joined the Chicago-based marketing firm as an equity principal. Nystuen was chief marketing officer for LaSalle Bank, where he worked for 30 years. Kineo, which in Greek means "to move forward," also announced that G. Brent Minor has been appointed a senior associate. Minor was a senior vice president at LaSalle and a former chairman of Chicago Loop Alliance.